New York Life (NYL) has
embarked on a restructuring that will see operations of the US’
largest mutual life insurer divided into an insurance group and an
investment group.
Chosen to head the newly
created insurance group is executive vice-president Chris
Blunt.
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Since 2008, Blunt has headed
the insurer’s Retirement Income Security (RIS) unit which focuses
on annuities. NYL’s operations in Mexico where it ranks as the
third-largest life insurer are also being incorporated into the
insurance group.
According to NYL, on a
consolidated basis, sales of the new insurance group were about
$3.3bn in 2011.
Heading the investment group
is executive vice-president John Y Kim, NYL’s chief investment
officer and head of New York Life Investments. Kim will also assume
responsibility for the RIS unit.
On a consolidated basis,
sales of the new investments group were more than $50bn in 2011 and
assets under management about $300bn.
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By GlobalDataCommenting on the
restructuring, NYL chairman and CEO Ted Mathas said: “This
strategic alignment maintains our industry-leading life insurance
business as our flagship core business.”
Based on premium income data
from insurance organisation LIMRA, NYL had an 11.7% share of the US
individual life insurance market in the third quarter of
2011.
Mathas heaped praise on Mark
Pfaff, an executive vice-president and head of NYL’s agency system
for the strong showing in the life insurance market.
“With his keen sense of
purpose and extensive experience in agency management, Mark has led
us to the first double-digit market share in new life insurance
premium in the company’s long history, an achievement driven almost
entirely by our career agents.”
Pfaff has been head of NYL’s
agency system since 2006, and from 2008 until the announcement of
the insurer’s new structure also headed its life insurance
operations. NYL has an agency force of some 12,000 agents, up from
9,300 in 2006.
Indicating that NYL has
potentially big expansion plans in the variable annuity (VA)
market, Mathas stressed that the new structure “enhances the
prospects of New York Life becoming a true leader in retirement
solutions beyond income annuities”.
At present, NYL ranks first
in the fixed immediate annuity segment where it held a market share
of 27.8% in the third quarter of 2011, according to
LIMRA.
During the same quarter,
LIMRA reported that NYL ranked 15th in the VA segment where it held
a market share of 1.5% with sales of $1.82bn.
The attraction of the VA
segment is clear, with total sales of $120bn recorded in the first
nine months of 2011 – almost double the $61.9bn sales in the fixed
annuity segment.
In addition, while VA sales
were up 16% compared with the first nine months of 2010, fixed
annuity sales were down by 1%.
There is certainly scope for
NYL to gain market share in the VA segment, scope that has been
enhanced by Canadian insurer Sun Life Financial’s closure to new
business in the US VA market at the end of 2011.
Sun Life held a 1.9% share of the US VA market in the
first nine months of 2011 with sales of $2.34bn and ranked
13th.
